Is It Time to Invest in FMCG Stocks? Expert Sudip Bandyopadhyay Shares Insights

Sudip Bandyopadhyay, Group Chairman of Inditrade Capital, believes that it’s a good time to start investing in stocks, but recommends doing so gradually. He suggests that while the market hasn’t corrected drastically, there are many stocks, like Reliance, that have seen significant price drops. He encourages investors to begin buying in parts rather than waiting for the market to stabilize completely.

When asked about the reasons behind Reliance’s recent fall, Bandyopadhyay attributes it mostly to Foreign Institutional Investor (FII) selling. He doesn’t see oil prices as a major factor, although there is some uncertainty around them.

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Bandyopadhyay is positive on FMCG stocks, particularly Hindustan Unilever (HUL). He believes competitive pressure on companies like Dabur and Godrej Consumer is a good sign for HUL. Additionally, with rural consumption on the rise and a favorable monsoon, he sees potential for HUL and suggests taking advantage of the current dip in prices.

On the auto sector, Bandyopadhyay notes that there are mixed opinions. While there is some confusion around inventory levels, he expects excitement in the auto space, especially with the upcoming Hyundai IPO. However, for medium to long-term investments, he advises focusing on auto ancillary companies rather than car manufacturers. Auto ancillary companies are better positioned to adapt to the transition from internal combustion engines (IC) to electric vehicles (EVs), making them a safer bet.

Bandyopadhyay also acknowledges that the auto sector, particularly four-wheelers, is facing a slowdown, with growth in passenger cars being modest at 3-4%. He sees challenges for the global auto industry, particularly with European manufacturers lowering their forecasts due to the economic slowdown in China. Despite these global pressures, the domestic market remains strong, providing growth opportunities for companies with a focus on India.

Among specific stock recommendations, Bandyopadhyay mentions HDFC Bank as an attractive buy after its recent correction, largely due to FII selling. He also highlights Sula Vineyards as a strong long-term investment option.

Overall, his advice is to selectively invest in stocks, particularly in the FMCG and banking sectors, while being cautious with the auto sector, favoring ancillary companies over manufacturers.